TECH REBOUND LEADS STOCKS RALLY ON WALL STREET

A surge in big technology stocks was pulling the stock market sharply higher on Tuesday, as a fall in bond yields was helping beaten-down technology companies recover, the Associated Press (AP) reported on March 10, 2021.

The surge comes a day after the Nasdaq closed 10% below its February peak, what is known as a “correction” on Wall Street. The S&P 500 was up 1.7% as of 10:50 a.m. Eastern.

The technology-heavy Nasdaq was up 3.2%, led by gains in Apple, Amazon, Facebook, and Cisco. The Dow Jones Industrial Average, which is weighted less toward tech than the other two indexes, was up a more modest 0.7%. The Russell 2000 index of small-company stocks was up 2%.

Investors were relieved to see that long-term interest rates were falling in the bond market. The yield on the 10-year Treasury note dropped to 1.55% after trading above 1.60% a day earlier.

Higher bond yields tend to pull money away from high-priced stocks like technology companies, which have been soaring through the pandemic.

Bank stocks, which had benefited from the rise in bond yields, were moving in the opposite direction as the rest of the market. Bank of America and Citigroup shares were down 1%, and JPMorgan Chase shares were down 0.5%.

Yields have been climbing with rising expectations for growth and the inflation that could follow.

Higher yields put downward pressure on stocks generally, in part because they can steer away dollars that might have gone into the stock market into bonds instead.

That makes investors less willing to pay such high prices for stocks, especially those that look the most expensive, such as technology stocks.

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